The Agricultural Development Bank (adb) is expected to offer about 140million ordinary shares,which is speculated to be about 50 percent of the bank, to the public after securing the endorsement of the Securities and Exchange Commission (SEC) to list on the local bourse.
SEC boss Dr. Adu Anane Antwi confirmed this to the B&FT, saying: “We have given them the approval.”
The Ministry of Finance holds a 52 percent stake in the re-branded bank, with the rest held by the BoG through a trustee.
adb in April 2014, secured Cabinet’s approval to list on the Ghana Stock Exchange subject to regulatory approvals.
The central bank has often been criticised for owning part of an entity in an industry it regulates — a situation that critics, among them the International Monetary Fund, say creates a conflict of interest and fuels perceptions of favouritism.
adb is the eighth-largest bank in Ghana by assets and the second-biggest of the three banks — including GCB and National Investment Bank — in which the state has a significant stake.
The bank is the ninth-largest by size loans in an industry of 27 banks. In 2013, its loan book expanded by 11 percent to GH¢0.9billion and the bank registered pre-tax earnings of GH¢84million. The equity in the bank stood at GH¢281million in 2013.
adb prides itself on being a bank dedicated to financing agriculture, but concerns have been raised about whether its current structure and operations give the needed thrust to the agricultural sector — with many commentators asking for the bank to be repositioned to upscale its agriculture business.
Ghana’s agricultural sector employs approximately 42 percent of the working population, according to census data. The sector is often said to be growing below potential, with farmers facing perennial problems such as the unavailability of modern equipment, erratic rainfall, and expensive credit.
Currently, adb is in the second year of its follow-up strategic plan for the 2014-2016 period — which plan is designed to ensure the bank’s sustainable growth and profitability and build on the key successes achieved in the previous strategic plan that was completed in 2012.
The SEC has in recent years been courting state-owned entities to the GSE to raise the required capital for its on-going projects and to improve its operations.
Utility companies — the Volta River Authority, Ghana Water Company Limited, Ghana Grid Company Limited — are among companies targetted by the SEC.
GOIL, GCB and SIC, which have large state interest, are currently listed on the local bourse.